UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number

811-21326

 

 

Cohen & Steers REIT and Preferred Income Fund, Inc.

(Exact name of registrant as specified in charter)

 

280 Park Avenue
New York, NY

 

10017

(Address of principal executive offices)

 

(Zip code)

 

Francis C. Poli
280 Park Avenue
New York, NY 10017

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

(212) 832-3232

 

 

Date of fiscal year end:

December 31

 

 

 

 

Date of reporting period:

March 31, 2009

 

 



 

Item 1. Schedule of Investments

 



 

COHEN & STEERS REIT AND PREFERRED INCOME FUND, INC.

 

SCHEDULE OF INVESTMENTS

March 31, 2009 (Unaudited)

 

 

 

Number

 

 

 

 

 

of Shares

 

Value

 

COMMON STOCK 62.3%

 

 

 

 

 

DIVERSIFIED 2.1%

 

 

 

 

 

Vornado Realty Trust(a)

 

157,474

 

$

5,234,436

 

 

 

 

 

 

 

HEALTH CARE 12.5%

 

 

 

 

 

HCP

 

400,788

 

7,154,066

 

Health Care REIT(b)

 

123,250

 

3,770,218

 

LTC Properties(b)

 

61,524

 

1,079,131

 

Nationwide Health Properties

 

377,767

 

8,382,650

 

Omega Healthcare Investors(b)

 

292,126

 

4,113,134

 

Senior Housing Properties Trust

 

123,560

 

1,732,311

 

Ventas

 

220,840

 

4,993,192

 

 

 

 

 

31,224,702

 

HOTEL 1.5%

 

 

 

 

 

Hospitality Properties Trust

 

209,402

 

2,512,824

 

Host Hotels & Resorts

 

321,530

 

1,260,398

 

 

 

 

 

3,773,222

 

INDUSTRIAL 3.7%

 

 

 

 

 

AMB Property Corp.

 

309,086

 

4,450,838

 

EastGroup Properties(b)

 

61,478

 

1,725,687

 

ProLogis

 

446,599

 

2,902,894

 

 

 

 

 

9,079,419

 

OFFICE 13.9%

 

 

 

 

 

BioMed Realty Trust

 

298,541

 

2,021,123

 

Boston Properties(a)

 

262,728

 

9,203,362

 

Highwoods Properties

 

195,418

 

4,185,853

 

Kilroy Realty Corp.

 

133,154

 

2,288,917

 

Liberty Property Trust

 

272,462

 

5,160,430

 

Mack-Cali Realty Corp.

 

596,502

 

11,816,705

 

 

 

 

 

34,676,390

 

RESIDENTIAL—APARTMENT 10.7%

 

 

 

 

 

American Campus Communities(b)

 

147,291

 

2,556,972

 

Apartment Investment & Management Co.

 

494,507

 

2,709,898

 

 

1



 

 

 

Number

 

 

 

 

 

of Shares

 

Value

 

AvalonBay Communities

 

78,977

 

$

3,716,657

 

BRE Properties

 

49,075

 

963,342

 

Education Realty Trust

 

392,447

 

1,369,640

 

Equity Residential

 

356,699

 

6,545,427

 

Home Properties

 

148,698

 

4,557,594

 

UDR

 

483,680

 

4,164,485

 

 

 

 

 

26,584,015

 

SELF STORAGE 6.4%

 

 

 

 

 

Extra Space Storage

 

244,800

 

1,348,848

 

Public Storage

 

196,980

 

10,883,145

 

Sovran Self Storage

 

148,523

 

2,982,342

 

U-Store-It Trust

 

353,000

 

713,060

 

 

 

 

 

15,927,395

 

SHOPPING CENTER 11.5%

 

 

 

 

 

COMMUNITY CENTER 5.1%

 

 

 

 

 

Federal Realty Investment Trust

 

110,132

 

5,066,072

 

Inland Real Estate Corp.

 

349,471

 

2,477,749

 

Kimco Realty Corp.

 

144,128

 

1,098,255

 

Regency Centers Corp.

 

152,638

 

4,055,592

 

 

 

 

 

12,697,668

 

FREE STANDING 0.1%

 

 

 

 

 

National Retail Properties

 

23,965

 

379,606

 

 

 

 

 

 

 

REGIONAL MALL 6.3%

 

 

 

 

 

Macerich Co.(a)

 

273,679

 

1,713,230

 

Simon Property Group

 

400,211

 

13,863,309

 

 

 

 

 

15,576,539

 

TOTAL SHOPPING CENTER

 

 

 

28,653,813

 

 

 

 

 

 

 

TOTAL COMMON STOCK
(Identified cost—$252,527,432)

 

 

 

155,153,392

 

 

 

 

 

 

 

PREFERRED SECURITIES—$25 PAR VALUE 44.9%

 

 

 

 

 

BANK 3.8%

 

 

 

 

 

BAC Capital Trust XII, 6.875%, due 8/2/55, Series C(b)

 

95,137

 

1,093,124

 

 

2



 

 

 

Number

 

 

 

 

 

of Shares

 

Value

 

Bank of America Corp., 8.625%, Series MER(b)

 

140,000

 

$

1,463,000

 

Citigroup Capital VIII, 6.95%, due 9/15/31 (TruPS)

 

60,048

 

514,611

 

Cobank ACB, 7.00%, 144A, ($50 par value)(c),(d)

 

120,000

 

3,253,320

 

JPMorgan Chase Capital XXVI, 8.00%, due 5/15/48, Series Z(b)

 

99,375

 

1,999,425

 

Wachovia Capital Trust X, 7.85%, due 12/1/67(b)

 

68,425

 

1,163,225

 

 

 

 

 

9,486,705

 

BANK—FOREIGN 9.0%

 

 

 

 

 

Barclays Bank PLC, 8.125%(b)

 

490,550

 

6,534,126

 

Deutsche Bank Contingent Capital Trust III, 7.60%(b)

 

235,000

 

3,052,650

 

HSBC Holdings PLC, 8.125%(b)

 

170,000

 

3,401,700

 

Royal Bank of Scotland Group PLC, 7.25%, Series T

 

13,806

 

86,288

 

Santander Finance Preferred, 4.00%, Series 6 (FRN)(b)

 

140,490

 

1,159,042

 

Santander Finance Preferred, 6.50%(b)

 

113,010

 

1,581,010

 

Santander Finance Preferred, 6.80%(b)

 

474,955

 

6,483,136

 

 

 

 

 

22,297,952

 

ELECTRIC—INTEGRATED 1.1%

 

 

 

 

 

FPC Capital I, 7.10%, due 5/13/39, Series A (QUIPS)(b)

 

121,150

 

2,654,396

 

 

 

 

 

 

 

ENERGY- INTEGRATED OIL & GAS 0.8%

 

 

 

 

 

Nexen, 7.35%, due 11/1/43, Series B(b)

 

116,745

 

1,932,130

 

 

 

 

 

 

 

FINANCE 2.0%

 

 

 

 

 

INVESTMENT BANKER/BROKER 1.2%

 

 

 

 

 

Bear Stearns Capital Trust III, 7.80%, 5/15/31(b)

 

70,000

 

1,466,500

 

Morgan Stanley Capital Trust III, 6.25%(b)

 

99,962

 

1,442,452

 

 

 

 

 

2,908,952

 

INVESTMENT BANKER/BROKER—FOREIGN 0.6%

 

 

 

 

 

Credit Suisse Guernsey, 7.90%(b)

 

90,000

 

1,531,800

 

 

 

 

 

 

 

MORTGAGE LOAN/BROKER 0.2%

 

 

 

 

 

Countrywide Capital V, 7.00%, due 11/1/36

 

50,000

 

474,000

 

TOTAL FINANCE

 

 

 

4,914,752

 

 

 

 

 

 

 

GAS—DISTRIBUTION 1.2%

 

 

 

 

 

Southwest Gas Capital Trust II, 7.70%, due 9/15/43(b)

 

147,140

 

3,053,155

 

 

3



 

 

 

Number

 

 

 

 

 

of Shares

 

Value

 

INSURANCE 9.5%

 

 

 

 

 

LIFE/HEALTH INSURANCE—FOREIGN 0.5%

 

 

 

 

 

Prudential PLC, 6.50%, Series A(b)

 

100,000

 

$

1,231,000

 

 

 

 

 

 

 

MULTI-LINE 0.5%

 

 

 

 

 

MetLife, 6.50%, Series B(b)

 

90,000

 

1,320,300

 

 

 

 

 

 

 

MULTI-LINE—FOREIGN 4.2%

 

 

 

 

 

Allianz SE, 8.375%(b)

 

400,000

 

6,740,000

 

ING Groep N.V., 7.375%(b)

 

328,300

 

3,063,039

 

ING Groep N.V., 8.50%(b)

 

61,353

 

668,748

 

 

 

 

 

10,471,787

 

PROPERTY CASUALTY 0.4%

 

 

 

 

 

Berkley W R Capital Trust II, 6.75%, due 7/26/45(b)

 

54,964

 

1,058,057

 

 

 

 

 

 

 

PROPERTY CASUALTY—FOREIGN 2.0%

 

 

 

 

 

Arch Capital Group Ltd., 7.875%, Series B(b)

 

100,443

 

1,872,257

 

Arch Capital Group Ltd., 8.00%(b)

 

160,000

 

3,176,000

 

 

 

 

 

5,048,257

 

REINSURANCE—FOREIGN 1.9%

 

 

 

 

 

Aspen Insurance Holdings Ltd., 7.401%, Series A(b)

 

160,000

 

2,148,800

 

Axis Capital Holdings Ltd., 7.50%, Series B ($100 par value)

 

40,000

 

2,472,500

 

 

 

 

 

4,621,300

 

TOTAL INSURANCE

 

 

 

23,750,701

 

 

 

 

 

 

 

MEDIA—DIVERSIFIED SERVICES 4.6%

 

 

 

 

 

Comcast Corp., 6.625%, due 5/15/56(b)

 

150,060

 

2,839,135

 

Comcast Corp., 7.00%, due 9/15/55, Series B(b)

 

350,094

 

7,047,392

 

Viacom, 6.85%, due 12/5/55(b)

 

87,013

 

1,490,533

 

 

 

 

 

11,377,060

 

REAL ESTATE 10.5%

 

 

 

 

 

DIVERSIFIED 1.6%

 

 

 

 

 

Duke Realty Corp., 6.95%, Series M(b)

 

100,000

 

850,000

 

Duke Realty Corp., 7.25%, Series N(b)

 

133,400

 

1,148,574

 

Duke Realty Corp., 8.375%, Series O(b)

 

100,004

 

1,138,045

 

 

4



 

 

 

Number

 

 

 

 

 

of Shares

 

Value

 

Vornado Realty Trust, 6.75%, Series H(b)

 

56,100

 

$

802,230

 

 

 

 

 

3,938,849

 

HEALTH CARE 1.2%

 

 

 

 

 

Omega Healthcare Investors, 8.375%, Series D(b)

 

159,669

 

2,874,042

 

 

 

 

 

 

 

INDUSTRIAL 0.3%

 

 

 

 

 

First Industrial Realty Trust, 7.25%, Series J(b)

 

109,560

 

794,310

 

 

 

 

 

 

 

OFFICE 0.5%

 

 

 

 

 

BioMed Realty Trust, 7.375%, Series A

 

55,000

 

590,150

 

SL Green Realty Corp., 7.625%, Series C(b)

 

70,000

 

689,500

 

 

 

 

 

1,279,650

 

OFFICE/INDUSTRIAL 1.3%

 

 

 

 

 

PS Business Parks, 7.00%, Series H(b)

 

108,864

 

1,742,913

 

PS Business Parks, 7.95%, Series K(b)

 

83,500

 

1,487,970

 

 

 

 

 

3,230,883

 

RESIDENTIAL- APARTMENT 0.9%

 

 

 

 

 

Apartment Investment & Management Co., 8.00%, Series V(b)

 

101,000

 

1,093,830

 

Apartment Investment & Management Co., 7.875%, Series Y(b)

 

110,000

 

1,136,300

 

 

 

 

 

2,230,130

 

SELF STORAGE 1.3%

 

 

 

 

 

Public Storage, 7.25%, Series I(b)

 

70,007

 

1,365,137

 

Public Storage, 7.25%, Series K(b)

 

100,035

 

1,923,673

 

 

 

 

 

3,288,810

 

SHOPPING CENTER 3.1%

 

 

 

 

 

COMMUNITY CENTER 3.1%

 

 

 

 

 

Developers Diversified Realty Corp., 7.50%, Series I

 

57,720

 

297,835

 

Kimco Realty Corp., 7.75%, Series G(b)

 

134,996

 

1,842,696

 

Regency Centers Corp., 7.25%, Series D(b)

 

140,000

 

2,207,800

 

Saul Centers, 8.00%, Series A(b)

 

60,000

 

1,320,000

 

Weingarten Realty Investors, 6.50%, Series F(b)

 

191,165

 

2,139,136

 

 

 

 

 

7,807,467

 

 

5



 

 

 

Number

 

 

 

 

 

of Shares

 

Value

 

REGIONAL MALL 0.0%

 

 

 

 

 

CBL & Associates Properties, 7.75%, Series C

 

3,100

 

$

19,685

 

TOTAL SHOPPING CENTER

 

 

 

7,827,152

 

 

 

 

 

 

 

SPECIALTY 0.3%

 

 

 

 

 

Digital Realty Trust, 7.875%, Series B(b)

 

46,900

 

754,386

 

TOTAL REAL ESTATE

 

 

 

26,218,212

 

 

 

 

 

 

 

TELECOMMUNICATION SERVICES 2.0%

 

 

 

 

 

Telephone & Data Systems, 7.60%, due 12/1/41, Series A(b)

 

217,505

 

3,808,513

 

United States Cellular Corp., 7.50%, due 6/15/34(b)

 

72,400

 

1,288,720

 

 

 

 

 

5,097,233

 

UTILITIES 0.4%

 

 

 

 

 

Xcel Energy, 7.60%(b)

 

40,000

 

928,400

 

 

 

 

 

 

 

TOTAL PREFERRED SECURITIES—$25 PAR VALUE
(Identified cost—$183,585,021)

 

 

 

111,710,696

 

 

 

 

 

 

 

PREFERRED SECURITIES—CAPITAL SECURITIES 48.4%

 

 

 

 

 

BANK 16.1%

 

 

 

 

 

AgFirst Farm Credit Bank, 6.585%, due 6/29/49 144A(d)

 

3,000,000

 

1,801,572

 

AgFirst Farm Credit Bank, 7.30%, due 10/14/49, 144A(c),(d)

 

18,000,000

 

9,192,060

 

Astoria Capital Trust I, 9.75%, due 11/1/29, Series B(c)

 

10,000,000

 

9,109,460

 

Bank of America Corp., 8.00%, due 12/29/49(b)

 

3,000,000

 

1,202,790

 

Bank of America Corp., 8.125%, due 12/29/49(b)

 

1,500,000

 

617,010

 

CoBank ACB, 11.00%, Series C, 144A(d)

 

100,000

 

4,570,550

 

JPMorgan Chase, 7.90%, due 4/29/49(b)

 

7,500,000

 

4,829,633

 

PNC Preferred Funding Trust I, 8.70%, due 12/31/49, 144A(d)

 

4,000,000

 

1,802,372

 

Regions Financing Trust II, 6.625%, due 5/15/47(b)

 

3,000,000

 

1,088,226

 

Sovereign Capital Trust VI, 7.908%, due 6/13/36(b)

 

4,250,000

 

2,814,524

 

Webster Capital Trust IV, 7.65%, due 6/15/37(b)

 

2,750,000

 

1,142,427

 

Wells Fargo & Co, 7.98%, due 2/28/49(b)

 

4,000,000

 

1,882,260

 

 

 

 

 

40,052,884

 

BANK—FOREIGN 6.9%

 

 

 

 

 

Barclays Bank PLC, 7.434%, due 9/29/49, 144A(d)

 

5,430,000

 

2,258,446

 

BNP Paribas, 7.195%, due 12/31/49, 144A(d)

 

6,000,000

 

3,074,100

 

 

6



 

 

 

Number

 

 

 

 

 

of Shares

 

Value

 

HSBC Capital Funding LP, 10.176%, due 12/29/49, 144A(d)

 

12,430,000

 

$

9,153,638

 

Standard Chartered PLC, 7.014%, due 12/30/49, 144A(d)

 

5,500,000

 

2,561,840

 

 

 

 

 

17,048,024

 

ELECTRIC—INTEGRATED 2.9%

 

 

 

 

 

Dominion Resources Capital Trust I, 7.83%, due 12/1/27(b)

 

2,464,000

 

2,014,460

 

DPL Capital Trust II, 8.125%, due 9/1/31

 

3,000,000

 

2,955,642

 

FPL Group Capital, 7.30%, due 9/1/67, Series D(b)

 

3,000,000

 

2,238,201

 

 

 

 

 

7,208,303

 

FINANCE 4.4%

 

 

 

 

 

CREDIT CARD 0.5%

 

 

 

 

 

Capital One Capital III, 7.686%, due 8/15/36(b)

 

4,000,000

 

1,365,104

 

 

 

 

 

 

 

DIVERSIFIED FINANCIAL SERVICES 1.8%

 

 

 

 

 

ZFS Finance USA Trust II, 6.45%, due 12/15/65, 144A(d)

 

10,500,000

 

4,542,248

 

 

 

 

 

 

 

INVESTMENT BANKER/BROKER 1.9%

 

 

 

 

 

Schwab Capital Trust I, 7.50%, due 11/15/37

 

7,500,000

 

4,737,307

 

 

 

 

 

 

 

INVESTMENT MANAGEMENT 0.2%

 

 

 

 

 

Aberdeen Asset Management, 7.90%, due 12/31/49

 

800,000

 

412,000

 

TOTAL FINANCE

 

 

 

11,056,659

 

FOOD 3.5%

 

 

 

 

 

Dairy Farmers of America, 7.875%, 144A(c),(d)

 

75,000

 

4,293,750

 

HJ Heinz Finance Co, 8.00%, due 7/15/13, 144A(d)

 

50

 

4,325,000

 

 

 

 

 

8,618,750

 

GAS UTILITIES 1.5%

 

 

 

 

 

Southern Union Co., 7.20%, due 11/1/66(b)

 

7,500,000

 

3,787,500

 

 

 

 

 

 

 

INSURANCE 6.5%

 

 

 

 

 

LIFE/HEALTH INSURANCE 1.0%

 

 

 

 

 

Great-West Life & Annuity Insurance Co., 7.153%, due 5/16/46, 144A(d)

 

5,000,000

 

2,505,950

 

 

 

 

 

 

 

MULTI-LINE 2.9%

 

 

 

 

 

AXA SA, 6.463%, due 12/31/49, 144A(d)

 

4,000,000

 

1,423,280

 

 

7



 

 

 

Number

 

 

 

 

 

of Shares

 

Value

 

AXA SA, 6.379%, due 12/14/49, 144A(d)

 

2,000,000

 

$

732,860

 

Catlin Insurance Co., 7.249%, due 12/1/49, 144A(d)

 

4,000,000

 

1,085,428

 

Old Mutual Capital Funding, 8.00%, due 5/29/49, (Eurobond)

 

2,000,000

 

740,000

 

USF&G Capital, 8.312%, due 7/1/46, 144A(d)

 

3,845,000

 

3,182,241

 

 

 

 

 

7,163,809

 

PROPERTY CASUALTY 2.6%

 

 

 

 

 

Liberty Mutual Group, 7.00%, due 3/15/37, 144A(c),(d)

 

8,000,000

 

2,886,640

 

Liberty Mutual Group, 7.80%, due 3/15/37, 144A(c),(d)

 

9,500,000

 

3,622,293

 

 

 

 

 

6,508,933

 

TOTAL INSURANCE

 

 

 

16,178,692

 

 

 

 

 

 

 

PIPELINES 3.3%

 

 

 

 

 

Enterprise Products Operating LP, 8.05%, due 10/1/37(b)

 

6,000,000

 

3,183,894

 

Enterprise Products Operating LP, 8.375%, due 8/1/66(b)

 

7,500,000

 

5,031,030

 

 

 

 

 

8,214,924

 

TELECOMMUNICATION SERVICES 3.3%

 

 

 

 

 

Centaur Funding Corp., 9.08%, due 4/21/20 144A(c),(d)

 

12,954

 

8,161,020

 

 

 

 

 

 

 

TOTAL PREFERRED SECURITIES—CAPITAL SECURITIES
(Identified cost—$213,110,642)

 

 

 

120,326,756

 

 

 

 

Principal

 

 

 

 

 

Amount

 

 

 

CORPORATE BONDS 7.7%

 

 

 

 

 

BANK 0.9%

 

 

 

 

 

CoBank ACB, 7.875%, due 4/16/18, 144A(d)

 

$

2,250,000

 

2,199,402

 

BANK—FOREIGN 1.1%

 

 

 

 

 

Barclays Bank PLC, 7.70%, due 4/25/49, 144A(d)

 

4,250,000

 

1,869,996

 

Natixis, 10.00%, due 4/29/49, 144A(d)

 

3,000,000

 

901,554

 

 

 

 

 

2,771,550

 

INSURANCE 4.7%

 

 

 

 

 

MULTI-LINE 1.1%

 

 

 

 

 

MetLife Capital Trust X, 9.25%, due 4/8/38, 144A(d)

 

5,000,000

 

2,804,285

 

 

8



 

 

 

Principal

 

 

 

 

 

Amount

 

Value

 

MULTI-LINE—FOREIGN 1.4%

 

 

 

 

 

QBE Insurance Group Ltd., 9.75%, due 3/14/14, 144A(d)

 

$

3,500,000

 

$

3,501,911

 

 

 

 

 

 

 

 

 

PROPERTY CASUALTY 2.2%

 

 

 

 

 

ACE Capital Trust II, 9.70%, due 4/1/30(b)

 

3,910,000

 

3,038,696

 

Liberty Mutual Group, 10.75%, due 6/15/58, 144A(d)

 

5,000,000

 

2,452,825

 

 

 

 

 

5,491,521

 

TOTAL INSURANCE

 

 

 

11,797,717

 

 

 

 

 

 

 

REAL ESTATE—SHOPPING CENTER—REGIONAL MALL 1.0%

 

 

 

 

 

Simon Property Group LP, 10.35%, due 4/1/19(b)

 

2,500,000

 

2,433,392

 

 

 

 

 

 

 

TOTAL CORPORATE BONDS
(Identified cost—$27,897,849)

 

 

 

19,202,061

 

 

 

 

Number

 

 

 

 

 

of Shares

 

 

 

SHORT-TERM INVESTMENTS 6.7%

 

 

 

 

 

MONEY MARKET FUNDS

 

 

 

 

 

Dreyfus Treasury Cash Management Fund, 0.09%(e)

 

2,700,570

 

2,700,570

 

Federated U.S. Treasury Cash Reserves Fund, 0.01%(e)

 

13,867,454

 

13,867,454

 

 

 

 

 

 

 

TOTAL SHORT-TERM INVESTMENTS
(Identified cost—$16,568,024)

 

 

 

16,568,024

 

 

 

 

 

 

 

TOTAL INVESTMENTS (Identified cost—$693,688,968)

170.0

%

 

 

422,960,929

 

 

 

 

 

 

 

 

LIABILITIES IN EXCESS OF OTHER ASSETS

(5.7

)%

 

 

(14,118,508

)

 

 

 

 

 

 

 

LIQUIDATION VALUE OF PREFERRED SHARES

(64.3

)%

 

 

(160,000,000

)

 

 

 

 

 

 

 

NET ASSETS APPLICABLE TO COMMON SHARES
(Equivalent to $5.15 per share based on 48,357,578 shares of common stock outstanding)

100.0

%

 

 

$

248,842,421

 

 

9



 


Glossary of Portfolio Abbreviations

 

FRN

 

Floating Rate Note

QUIPS

 

Quarterly Income Preferred Securities

REIT

 

Real Estate Investment Trust

TruPS

 

Trust Preferred Securities

 

Note: Percentages indicated are based on the net assets applicable to common shares of the Fund.

(a) A portion of the security is segregated as collateral for interest rate swap transactions: $14,134,650 has been segregated as collateral.

(b) A portion or all of the security is pledged in connection with the revolving credit agreement: $115,000,273 has been pledged as collateral.

(c) Illiquid security. Aggregate holdings equal 16.3% of net assets applicable to common shares of the Fund.

(d) Resale is restricted to qualified institutional investors. Aggregate holdings equal 35.4% of net assets applicable to common shares of the Fund.

(e) Rate quoted represents the seven day yield of the fund.

 

10



 

Interest rate swaps outstanding at March 31, 2009 are as follows:

 

 

 

 

 

Fixed

 

Floating Rate(a)

 

 

 

 

 

 

 

Notional

 

Rate

 

(reset monthly)

 

Termination

 

Unrealized

 

Counterparty

 

Amount

 

Payable

 

Receivable

 

Date

 

Depreciation

 

Merrill Lynch Derivative Products Ag(b)

 

$

45,000,000

 

3.510

%

0.523

%

December 22, 2012

 

$

(3,075,872

)

Royal Bank of Canada(b)

 

$

60,000,000

 

3.653

%

0.556

%

July 17, 2013

 

(4,650,406

)

Royal Bank of Canada(b)

 

$

70,000,000

 

3.615

%

0.523

%

March 29, 2014

 

(5,397,739

)

 

 

 

 

 

 

 

 

 

 

$

(13,124,017

)

 


(a) Based on LIBOR (London Interbank Offered Rate). Represents rates in effect at March 31, 2009.

(b) Fair valued security. This security has been fair valued at its fair value as determined in good faith under procedures established by and under the general supervision of the Fund’s board of directors. Aggregate holdings equal (5.3)% of net assets applicable to common shares of the Fund.

 

Limited Access

 



 

Note 1: Portfolio Valuation: Investments in securities that are listed on the New York Stock Exchange are valued, except as indicated below, at the last sale price reflected at the close of the New York Stock Exchange on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices for the day or, if no asked price is available, at the bid price.

 

Securities not listed on the New York Stock Exchange but listed on other domestic or foreign securities exchanges or admitted to trading on the National Association of Securities Dealers Automated Quotations, Inc. (Nasdaq) national market system are valued in a similar manner. Securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined as reflected on the tape at the close of the exchange representing the principal market for such securities.

 

Readily marketable securities traded in the over-the-counter market, including listed securities whose primary market is believed by Cohen & Steers Capital Management, Inc. (the investment manager) to be over-the-counter, but excluding securities admitted to trading on the Nasdaq National List, are valued at the official closing prices as reported by Nasdaq, the Pink Sheets, or such other comparable sources as the Board of Directors deem appropriate to reflect their fair market value. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices for the day, or if no asked price is available, at the bid price. However, certain fixed-income securities may be valued on the basis of prices provided by a pricing service when such prices are believed by the Board of Directors to reflect the fair market value of such securities. Where securities are traded on more than one exchange and also over-the-counter, the securities will generally be valued using the quotations the Board of Directors believes most closely reflect the value of such securities. Interest rate swaps are valued utilizing quotes received from an outside pricing service.

 

Portfolio securities primarily traded on foreign markets are generally valued at the closing values of such securities on their respective exchanges or if after the close of the foreign markets, but prior to the close of business on the day the securities are being valued, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board of Directors.

 

Securities for which market prices are unavailable, or securities for which the investment manager determines that bid and/or asked price does not reflect market value, will be valued at fair value pursuant to procedures approved by the Fund’s Board of Directors. Circumstances in which market prices may be unavailable include, but are not limited to, when trading in a security is suspended, the exchange on which the security is traded is subject to an unscheduled close or disruption or material events occur after the close of the exchange on which the security is principally traded. In these circumstances, the Fund determines fair value in a manner that fairly reflects the market value of the security on the valuation date based on consideration of any information or factors it deems appropriate. These may include recent transactions in comparable securities, information relating to the specific security and developments in the markets.

 

The Fund’s use of fair value pricing may cause the net asset value of Fund shares to differ from the net asset value that would be calculated using market quotations. Fair value pricing

 



 

involves subjective judgments and it is possible that the fair value determined for a security may be materially different than the value that could be realized upon the sale of that security.

 

Short-term debt securities, which have a maturity date of 60 days or less, are valued at amortized cost, which approximates value.

 

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), effective January 1, 2008. In accordance with FAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. FAS 157 establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Fund’s investments, and requires additional disclosure about fair value. The hierarchy of inputs is summarized below.

 

·                  Level 1 – quoted prices in active markets for identical investments

·                  Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

·                  Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

The following is a summary of the inputs used as of March 31, 2009 in valuing the Fund’s investments carried at value:

 

 

 

 

 

Fair Value Measurements at March 31, 2009 Using

 

 

 

 

 

Quoted Prices In

 

Significant

 

Significant

 

 

 

 

 

Active Market for

 

Other Observable

 

Unobservable

 

 

 

 

 

Identical Assets

 

Inputs

 

Inputs

 

 

 

Total

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities

 

$

422,960,929

 

$

261,138,268

 

$

146,114,571

 

$

15,708,090

 

 

 

 

 

 

 

 

 

 

 

Other Financial Instruments*

 

(13,124,017

)

 

(13,124,017

)

 

 



 


* Other financial instruments are interest rate swap contracts.

 

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

 

 

 

Investments
in Securities

 

Balance as of December 31, 2008

 

$

24,596,427

 

 

 

 

 

Accrued premiums

 

27

 

 

 

 

 

Realized loss

 

(2,292,468

)

 

 

 

 

Change in unrealized depreciation

 

(503,985

)

 

 

 

 

Net sales

 

(2,590,000

)

 

 

 

 

Transfers in/out of Level 3

 

(3,501,911

)

Balance as of March 31, 2009

 

$

15,708,090

 

 

Note 2. Derivative Investments: The Fund has adopted the provisions of Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (FAS 161). This new standard requires funds to disclose information intended to enable financial statement users to understand how and why the fund uses derivative instruments, how derivative instruments are accounted for under FAS 133 and how derivative instruments affect the company’s financial position, results of operations, and cash flows. All changes to the disclosures required in this report have been made in accordance with FAS 161.

 

The following is a summary of the market valuations of the Fund’s derivative instruments:

 

Interest Rate Contracts

 

$

(13,124,017

)

 

Interest Rate Swaps: The Fund uses interest rate swaps in connection with the sale of preferred shares and borrowing under its credit agreement. The interest rate swaps are intended to reduce the risk that an increase in short-term interest rates could have on the performance of the Fund’s common shares as a result of the floating rate structure of the preferred shares and the credit agreement. In these interest rate swaps, the Fund agrees to pay the other party to the interest rate swap (which is known as the counterparty) a fixed rate payment in exchange for the counterparty agreeing to pay the Fund a variable rate payment that is intended to approximate the Fund’s variable rate payment obligation on the preferred shares and the credit agreement. The payment obligation is based on the notional amount of the swap. Depending on the state of interest rates in general, the use of interest

 



 

rate swaps could enhance or harm the overall performance of the common shares. The market value of interest rate swaps is based on pricing models that consider the time value of money, volatility, the current market and contractual prices of the underlying financial instrument. Unrealized appreciation is reported as an asset and unrealized depreciation is reported as a liability on the Statement of Assets and Liabilities. The change in value of swaps, including the accrual of periodic amounts of interest to be paid or received on swaps, is reported as unrealized appreciation or depreciation in the Statement of Operations. A realized gain or loss is recorded upon payment or receipt of a periodic payment or termination of swap agreements. Swap agreements involve, to varying degrees, elements of market and counterparty risk, and exposure to loss in excess of the related amounts reflected in the Statement of Assets and Liabilities. The Fund’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from or paid to the counterparty over the contract’s remaining life, to the extent that such amount is positive.

 



 

Note 3. Income Tax Information

 

As of March 31, 2009, the federal tax cost and net unrealized depreciation were as follows:

 

Gross Unrealized appreciation

 

$

5,966,467

 

Gross Unrealized depreciation

 

(276,694,506

)

Net unrealized depreciation

 

$

(270,728,039

)

 

 

 

 

Cost for federal income tax purpose

 

$

693,688,968

 

 



 

Item 2. Controls and Procedures

 

(a)                                The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these disclosure controls and procedures required by Rule 30a-3(b) under the Investment Company Act of 1940 and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act as of a date within 90 days of the filing of this report.

 

(b)                               During the last fiscal quarter, there were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 3. Exhibits.

 

(a)                                Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.

 



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

COHEN & STEERS REIT AND PREFERRED INCOME FUND, INC.

 

 

By:

/s/ Adam M. Derechin

 

 

Name: Adam M. Derechin

 

 

Title: President

 

 

 

 

 

Date: May 28, 2009

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

By:

/s/ Adam M. Derechin

 

By:

/s/ James Giallanza

 

Name: Adam M. Derechin

 

 

Name: James Giallanza

 

Title: President and principal executive officer

 

 

Title: Treasurer and principal financial officer

 

 

 

 

 

 

Date: May 28, 2009